More Evidence That Apple's iPhone 5C Can Succeed in China

According to data from Canalys, Apple (NASDAQ: AAPL) captured only about 4.8% of all smartphone shipments in China during the second quarter. Cheap smartphones continued to push Apple's iPhone out of the picture.

This is certainly disappointing news to Apple investors. The country remains the world's largest smartphone market, and Apple's market share is hurting. But can an iPhone 5C change the story? Fool contributor Daniel Sparks thinks so.

In the following video, Daniel tells investors why the Chinese market is so important to Apple. Then he highlights new datafrom Morgan Stanley's Katy Huberty that suggests the combination of an iPhone 5C and a partnership with China Mobile could launch the company to No. 1 in market share in the country.

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Thanks for the comment. While a low-cost iPhone will certainly hurt the margins of Apple's iPhone line, it may still boost the company's overall gross profit margin. This would happen because the profit margin on the iPhone line is substantially higher than the rest of Apple's product lines -- so even if the low-cost iPhone had lower margins than the premium iPhone, it's margins are still likely higher than the company average. So if sales significantly increase due to the lower price point, then Apple's iPhone line can have a greater influence on the company's overall gross profit margin.